In re TILTON. TILTON v. HELMS et al., 2 F.2d 799

HUNT, Circuit Judge (after stating the facts as above). The receipts on their faces are acknowledgments of moneys delivered to Tilton for purposes of loans for the benefit of the lenders, the sums to be returned to the persons who turned the moneys over to Tilton, together with interest at the rate of 10 per cent. Tilton's relationship to the owners of the moneys became that of an agent toward his principals.

Putting aside for the instant the evidence of the houseboat transaction, it is plain that no particular loans were contemplated by the lenders, and that Tilton, who carried on a loaning business, could use his discretion in honestly making loans, subject to. the requirements that the sums be returned six months after date of his receipts to his principals, plus the prescribed interest.

There is no evidence that Tilton failed to lend the moneys for which he gave the receipts, or that he made a false statement in the writings with intent to obtain the moneys delivered to him. .On the other hand, he testified that all moneys received by him from creditors in the position of Mrs. Holms were actually used, principally in. chattel loans, and partly on real estate, and that Ms boots showed a loss of $29,000 on chattels. Ho attempt was made to rebut Tilton’s testimony, although Ms books were available to the objectors.

The houseboat transaction occurred in September, 1919, or nearly 4½ years prior to the time that Mrs. Helms gave her testimony. Mrs. Helms’ version of the circumstances connected with the $300 receipt conflicts with that of Tilton, and, if the facts were as she gave them, the reasonable inference is that Tilton obtained the $300 by a materially false statement in writing, made with intent to deceive; but, if Tilton’s statement is correct, Mrs. Helms delivered the $300 to him before they left his office to look at certain properties, and it was after examining the houseboat that the loan was refused.

Ho such loan was made, and it is to be observed that there is no evidence tending to show that, when Tilton received the $300, he was financially embarrassed or contemplated business failure. He kept up his interest payments for several years, and his testimony is that not until January, 1921, did he know that he was in embarrassed circumstances. Considering all the circumstances together, we think the evidence against Ms application for discharge is not of that strength and convincing character that the law requires as ground for denial of discharge in bankruptcy.

We must therefore reverse the order of the District Court, and remand the matter, with directions to dismiss the objections and to grant tbe application for a discharge. Reversed.